KUALA LUMPUR, Aug 20 — Maybank Investment Bank (Maybank IB) has cut its earnings forecast for Dialog Group Bhd (Dialog) for financial years ending June 30, 2022 and 2023 (FY22-23) by 8.0 per cent, largely to account for the potential operational setback from further lockdowns in the future.
In a research note today, the investment bank said the group’s FY21 results came in below its /consensus estimates.
“Core earnings fell 7.0 per cent year-on-year (y-o-y) as operations were continuously disrupted by the multiple lockdowns due to the Covid-19 pandemic, leading us to cut FY22-23 earnings by 8.0 per cent.
“That said, we remain positive of Dialog’s long-term outlook. Its prime land in Pengerang, operating track record, financial strength and management acumen are key enablers to capitalising on the demand for storage terminals in Asia,” said Maybank IB.
Dialog’s net profit for FY21 ended June 30, 2021, declined to RM543.14 million compared to RM630.36 million y-o-y, while revenue slipped to RM1.6 billion from RM2.3 billion previously; largely due to the operational disruptions due to the multiple lockdowns during the financial year.
Meanwhile, CGS-CIMB said until global travel restrictions ease, Dialog’s business development at Pengerang (Phase 3) would likely be held in abeyance, and its plant maintenance revenue potential may be capped.
“These circumstances suggest the absence of near-term share price catalysts. Still, with Asia-Pacific oil demand likely to grow over the next two decades, the Pengerang terminal area holds great medium- and long-term potential,” the brokerage firm said.
Maybank IB has maintained its “buy” call on Dialog’s shares with a target price (TP) of RM4.90, while CGS-CIMB also maintained its “add” call with a TP of RM3.70.
As at 11.35am, Dialog’s shares were flat at RM2.60. — Bernama